WIREDGOV

Plot to keep Iran's 'Top Gun' jets flying ... ...with parts from eBay!

HM REVENUE AND CUSTOMS News Release (NAT 40/09) issued by COI News Distribution Service on 4 June 2009

Three men were jailed for a total of ten years for their part in a plot to supply military equipment to keep Iranian F-14 'Tomcat' fighter jets airborne and combat ready in contravention of an embargo on military exports to Iran.

HM Revenue & Customs officers uncovered the plot when they found a consignment of oxygen cylinders at Heathrow Airport which were bound for Tehran.

The restricted parts had been sourced in the United States of America using eBay thereby avoiding export controls.

Mohsen Akhavan Nik and his son Mohammad Akhavan Nik, who were granted political asylum in the UK having apparently fled from Iran in 1995, together with Nithish Jaitha, breached an arms embargo by acting as middle-men supplying military hardware to Iran until officers uncovered their network of illegal shipments and fraudulent documents.

Mohsen Nik, 49, and Mohammad Nik, 26, of Ascot, Berkshire, were jailed for five years and two-and-a-half years respectively. Jaitha, 43, of Chalgrove, Oxford, was jailed for two-and-a-half years. All three denied charges of conspiracy to export controlled goods in a five week trial at Southwark Crown Court.

Iran's ageing jet fighters, including the F-14 'Tomcat', as featured in the 1980s film 'Top Gun', together with F4 Phantoms, F5 Tigers and Cobra Attack Helicopters can only be kept in service through parts purchased in the USA and then illegally shipped to Iran using fraudulent paperwork and bogus supply routes.

The conspiracy came to light in May 2006 when HMRC officers at Heathrow Airport stopped a Tehran bound consignment of eight liquid oxygen cylinders from being shipped in contravention of a 1993 UK embargo on military goods to Iran. The technical equipment, which is vital in enabling fighter pilots to breathe at high altitude, is specifically tailored for military jets and has limited civilian application.

The items were sourced on E-bay in America and shipped to an address in Florida to avoid the need for an export license. From there the goods were normally despatched under misleading descriptions to Iran via the UK, Romania or Hong Kong so as to overcome US export controls and obscure the final destination. And the three defendants also had liquid oxygen converters seized in Romania and the US. The defendants claimed the items were for use in the health sector, specifically for breathing apparatus in an ambulance. The accused fabricated documents and trade catalogues to reinforce their claim but court evidence from technical experts showed this to be untrue.

Mohsen Akhavan Nik would receive a list from one of two people in Iran requesting him to obtain parts and supply quotes for the delivery of those parts to Iran. Those requests included not just liquid oxygen converters but a vast array of parts required for military jets ranging from military radios and transceivers, through helicopter engine transmissions to electric drive motors to power 20mm "Gatling type" cannons. Mohsen Akhavan Nik and Mohammad Akhavan Nik then asked Jaitha to source the parts from the United States. On regular occasions the supplier of the parts would specifically state that the parts required an export licence from the United States authorities before those parts could be exported.

When that happened the defendants pretended that the customer for the parts was in the United States and would arrange shipment of the goods to an address in Florida that had been set up by Mohsen Akhavan Nik and Mohammad Akhavan Nik. Once the goods were received in Florida, they were exported under cover of paperwork that invariably provided a misleading description of the parts together with a value that was always a tiny fraction of the price that the parts had been bought for.

Customs officers had previously warned Mohsen Akhavan Nik against such prohibited trade in 2000 when an illegal shipment of lasers to Iran was seized. He claimed the goods were used to project advertising slogans onto the outside of buildings. The devices were in fact not for advertising but battle simulation by tanks. Despite this warning they continued trading until the current case and the arrest of the Nik's in August 2007. Jaitha was arrested in November 2007 and together with computers and paperwork seized from all companies Customs officers in the UK, with the assistance of Customs authorities in the USA, Romania and Hong Kong were able to piece together the illegal trade to Iran.

Peter Millroy, Head of HMRC's specialist unit on military exports, said:
"These men were involved in a complex and lucrative conspiracy to supply military equipment to Iran in contravention of a UK arms embargo. This is an excellent result dismantling as it does this particular supply route."
Mohsen Nik was also disqualified as a company director for seven years. A confiscation hearing will take place at court in due course.

NOTES FOR EDITORS

1. The defendants were charged as follows:

Count One
Conspiracy to evade the prohibition on the export of goods contrary to Section 1(1) of the Criminal Law Act 1977

Particulars of Offence
Mohsen Akhavan NIK, Mohammad Akhavan NIK and Nitish JAITHA between the 31st December 2005 and the 23rd August 2007, conspired together and with persons unknown to export goods, namely aircraft components and equipment, to Iran, with intent to evade the prohibition on exportation in respect of those goods, imposed by the Export of Goods, Transfer of Technology and Provision of Technical Assistance (Control) Order 2003, in contravention of Section 68(2) of the Customs and Excise Management Act 1979.

Count Two
Conspiracy to evade the prohibition on the movement of controlled goods between third countries contrary to Section 1(1) of the Criminal Law Act 1977

Particulars of Offence
Mohsen Akhavan NIK, Mohammad Akhavan NIK and Nitish JAITHA between the 31st December 2005 and the 23rd August 2007, conspired together and with persons unknown to transfer, acquire or dispose of controlled goods, namely goods specified in Schedule 1 to the Export of Goods, Transfer of Technology and Provision of Technical Assistance (Control) Order 2003, with intent to evade a prohibition contained in article 4 and article 9(2) of The Trade in Goods (Control) Order 2003.

2. The defendants were sentenced as follows:

Mohsen Akhavan NIK
Five years for count one and three years for count two, to run concurrent.
Mohsen Nik was also disqualified from being a company director for seven years.

Mohammad Akhavan NIK
Two-and-a-half years for count one and 18 months for count two, to run concurrent.

Nitish JAITHA
Two-and-a-half years for count one and 18 months for count two, to run concurrent.

3. A short film showing liquid oxygen converters being fitted to an F4 Phantom can be viewed or downloaded at http://nds.coi.gov.uk/infocus/Detail.asp?ReleaseID=402631&NewsAreaID=360

4. HMRC investigators were assisted by the Customs & Excise Department of Hong Kong, the Customs authorities of Romania and the US Immigration and Customs Enforcement.

5. The case was prosecuted by the Revenue & Customs Prosecution Office which was created by Royal Assent on 7 April 2005. RCPO is an independent prosecuting authority which reports directly to the Attorney General.

6. The UK has had a national arms embargo in place on Iran since March 1993.
The relevant statutory instruments implemented in UK law are:
* Export Control Order 2008 (SI 2008/3231)
Iran is a destination listed in this Order under Schedule 4, Part 1 (Countries and Destinations subject to stricter export of trade controls)
* The Export Control (Iran) Oder 2007 (SI 2007/1526)
* The Export Control (Iran) (Amendment) Order 2007(SI 2007/2170)
This is national legislation to provide for licensing, enforcement and penalty provisions in respect of EU Regulation which came into force 27 July 2007.
* The Export Control (Iran) (Amendment) Order 2008 (SI 2008/3063)
Exporters can apply for an export control licence for their goods. All applications will be considered by the Government on a case by case basis in line with the provisions of the Consolidated Criteria for UK and EU Arms Exports.

Issued by HM Revenue & Customs Press Office
Press enquiries only please contact:
Mike Burrell
Tel: 020 7147 0052
E-mail: mike.burrell@hmrc.gsi.gov.uk
Website http://www.hmrc.gov.uk